PRESCRIPTION
Chapter 1: General Provisions 1106. By Prescription:
A. One acquires ownership and other real rights through the lapse of time in the manner and under the conditions laid down by law B. Rights and actions are lost
Sinaon vs. Sorongon: implied trust is subject to prescription; prescription is rightly regarded as a statute of repose
Morales vs. CFI of Misamis Occidental: prescription was not allowed to apply to obtain ownership over a particular property due to the fact that the statutory period was not complied with
Two kinds of Prescription:
1. Acquisitive—acquisition of a right by the lapse of time; other names are adverse possession and usucapcion
o Usucapcion—expressly vests the property and raised a new title in the occupant
2. Extinctive—rights and actions are lost by the lapse of time; another name is limitation of action
o Bar the right of action
The concept most fundamental to a system of title by possession: the relationship between the occupant and the land in terms of possession is capable of producing legal consequences; in other words, the possessor is the actor.
Acquisitive Extinctive
The possessor is the actor One does not look at the act of the possessor but at the neglect of the owner
Important feature
Claimant in possession The owner out of possession
Concept of laches—doctrine of stale—based upon grounds of public policy which requires, for the peace of the society, and the discouragement of stale claims
o Applies independently of prescription and the prescriptive period has not yet expired
o Can also bar the filing or prosecution of a suit o Requisites:
1. Conduct on the defendant giving rise to the situation of which complaint is made and for which the complaint seeks a remedy
2. Delay in asserting the complainant’s rights, the complainant having knowledge or notice of the defendant’s conduct and having been afforded an opportunity to institute a suit
3. Lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit
4. Injury or prejudice to the defendant in the event relief is accorded to the complainant or the suit is not held barred
Laches Statute of Limitation
Concerned with the effect of the delay
Concerned with fact of delay A question of inequity of permitting
a claim to be enforced A matter of time Statutory
Equity Applies at law
Based on fixed time 1107.
A. Persons capable of acquiring property or rights by the other legal modes may acquire the same by means of prescription
B. Minors and other incapacitated persons, may acquire property or rights by prescription, either personally or through their parents, guardians or legal representatives
The acquisition of a minor without the assistance of his parents or guardian is annullable or voidable
However, when such minor comes of age, he may ratify the acquisition
1108. Prescription, both acquisitive and extinctive, runs against:
A. Minors and other incapacitated persons—who have parents, guardians or other legal representatives
Art. 1108(1) of the Civil Code—illegitimate child cannot claim exemption from the effects of prescription because they fall squarely under the said article
B. Absentees—who have administrators, either appointed by them before their disappearance or appointed by the courts
If the absentee can go back to his domicile but he intentionally does not want to return, prescription will lie against him
With persons living abroad without administrators, prescription will not run against them but it must be shown that they cannot return to their domicile within the period when prescription should have run
D. Juridical persons—except the State and its subdivisions
Juridical persons—endowed by law of the attributes of a natural person and hence can acquire and lose properties and rights
State and its subdivision, acting in their sovereign capacity, cannot be the subject of prescription
But if the political subdivision or instrumentality of the government is acting in its proprietary character, prescription will lie against it Persons who are disqualified from administering their property
have a right to claim damages from their legal representatives whose negligence has been the cause of prescription.
1109. Prescription does not run between:
A. Husband and Wife—even though there be a separation of property agreed upon in the marriage settlements or by judicial decree
Art. 1109 of the 1950 Civil Code—prescription by adverse possession cannot exist between husband and wife
B. Parents and Children—during the minority or insanity of the latter
Natural bond of filiation is the basis of this rule
C. Guardian and Ward—during the continuance of the guardianship
Due to fiduciary relationship, prescription will not lie during the period of guardianship
1110. Prescription, acquisitive and extinctive, runs in favor of, or against a married woman
1111. Prescription, obtained by a co-proprietor or a co-owner shall benefit the others
Co-ownership—exists when the ownership of an undivided thing or right belongs to different persons
1112. Persons with capacity to alienate property may renounce prescription already obtained, but not the right to prescribe in the future.
It is deemed to have been tacitly renounced when the renunciation results from acts which imply the abandonment of the right required
When a debt is already barred by prescription, it cannot be enforced by the creditor. But a new contract recognizing and assuming the prescribed debt would be valid and enforceable
A new express promise to pay a debt barred, take the case from the operation of the statute of limitations as this proceeds upon the ground that as a statutory limitation merely bars the remedy and does not discharge the debt, there is something more than a mere moral obligation to support a promise, to wit – a pre-existing debt which is a sufficient consideration constitutes, in fact, a new cause of action
1113. All things which are within the commerce of men are susceptible of prescription, unless otherwise provided.
Property of the State or any of its subdivisions not patrimonial in character shall not be the object of prescription
Forest lands of the public domain cannot be acquired by prescription, its possession however long cannot ripen into private ownership
Judicial confirmation of imperfect title—those who, by themselves or through their predecessors-in-interest, have been in the open, continuous, exclusive, and notorious possession and occupation of agricultural lands of the public domain, under bona fide claim of ownership, for at least 30 years immediately preceding the filing of the application for confirmation of title
1114. Creditors and all other persons interested in making the prescription effective may avail themselves thereof notwithstanding the express or tacit renunciation by the debtor or proprietor
1115. The provisions of the present Title are understood to be without prejudice to what in this Code or in special laws is established with respect to specific cases of prescription
In case of conflict between the period provided in this Title and in another portion of the Civil Code: the more specific provision will prevail
If different statutes are involved providing for different prescriptive periods, as well as the types of cause of action contemplated by them are apparently conflicting, they do not exclude each other from being availed of by the aggrieved party
1116. Prescription already running before the effectivity of this Code shall be governed by laws previously in force
But if since the time of this Code took effect, the entire period herein required for prescription should elapse, the present Code shall be applicable, even though by the former laws a longer period might be required
Situations:
A. Prescriptive period under the old law has lapsed before the effectivity of the 1950 Civil Code—prescriptive period of the old law shall apply B. Prescriptive period under the old law is still running upon the
effectivity of the 1950 Civil Code
i. Old law provides for a different period for the same situation—1950 Civil Code shall prevail provided that the prescriptive period of such has already lapsed even though under the old law, the period has not yet lapsed.
ii. The remaining balance of the prescription period in the old law since the effectivity of the 1950 Civil Code is shorter than that provided in the latter—old prescriptive law will apply
Chapter 2: Prescription of Ownership and Other Legal Rights 1117. Acquisitive prescription of dominion and other legal rights may be:
A. Ordinary—requires possession of things in good faith and with just title for the time fixed by law
Requires uninterrupted possession for the required statutory period of years in good faith and with a just title
B. Extraordinary
Requires uninterrupted possession for the required statutory period of years but without need of just title and good faith on the part of the possessor
1118. Possession has to be in the concept of an A. Owner
The possessor asserts dominion over the property to the exclusion of all others
It must be adverse possession
For possession to constitute a foundation of a prescriptive right, it must be en concepto de dueno (claim of title) or that possession should be adverse.
B. Public
There must be a notorious holding of the property known to the community
It must not be of a surreptitious character because it must be in the concept of an owner
C. Peaceful
There must be no valid interference from others claiming or asserting their rights to the property for acquisitive prescription to apply
D. Uninterrupted
―while tax declaration and tax receipts are not necessarily evidence of title, they are considered as a strong evidence of possession for no one in his right mind would be paying taxes year after year for a property that is not in his actual possession‖
1119. Acts of possessory character executed in virtue of license or by mere tolerance of the owner shall not be available for the purposes of possession
Possession by tolerance does not imply an assertion of ownership and thus produces no effect with respect to possession or prescription 1120. Possession is interrupted for the purposes of prescription either:
A. Naturally—through any cause it should cease for more than 1 year B. Civilly—produced by judicial summons to the possessor
An uninterrupted possession strengthens the adverse right of the possessor
1121. Possession is naturally interrupted when through any cause it should cease for more than 1 year.
The old possession is not revived if a new possession should be exercised by the same adverse claimant
1122. If the natural interruption is for only one year or less, the time elapsed shall be counted in favor of the prescription
Example for 1121 and 1122:
o B sold his property in a public action where A was the highest bidder. A was already in possession of the said land for 4 years before Z claimed that he was the rightful owner. A left the said property for 2 years before A found out that Z was a fraud. A continued to be in the possession of the property for 7 years before C claimed that he had purchased the disputed property before A did. A will not own the land by ordinary acquisitive prescription even though he had possessed the property for a total of 11 years because the interruption was more than 1 year. But if the interruption was only a year or less, that said time will be computed in favor of the prescription.
1123. Civil interruption is produced by judicial summons to the possessor
It is not the filing of the complaint in court which interrupts the possession. It is interrupted upon the receipt of the possessor of the judicial summons after the filing of the complaint.
1124. Judicial summons shall be deemed not to have been issued and shall not give rise to interruption:
A. If it should be void for lack of legal solemnities
Judicial summons have been served by a person not authorized by the court
B. If the plaintiff should desist from the complaint or should allow the proceedings to lapse
Desistance—means voluntarily having the case dismissed
Allowing the proceeding to lapse—manifests the lack of interest to prosecute the case
C. If the possessor should be absolved from the complaint
Absolution—the complaint have not been fully substantiated to support any adverse claim by the complainant
The possessor is always presumed to be in good faith
In all these cases, the period of interruption shall be counted for the prescription.
1125. Ant express or tacit recognition which the possessor may make of the owner’s right also interrupts possession.
This is the recognition that one owner recognizes somebody else as having a superior right as an owner
―Where the sale is subject to the owner’s right of redemption, the purchaser’s possession has been held in subordination to the title of the owner prior to the expiration of the redemption period, although it may become hostile thereafter‖
1126. Against a title recorded in the Registry of Property, ordinary prescription of ownership or real rights shall not take place to prejudice a third person, except in virtue of another title also recorded; and the time shall begin to run from the recording of the latter.
As to lands registered under the Land Registration Act, the provisions of that special laws shall govern
Although prescription will not apply to registered property, the doctrine of laches is applicable.
Laches—the rule of ineffectivity of stale demands; inaction for an unreasonable and unexplained length of time constitutes laches
A registered landowner may lose his right to recover the possession of his registered property be reason of laches.
1127. The good faith of the possessor consists in the reasonable belief that the person from whom he received the thing was the owner thereof, and could transmit his ownership
1128. The conditions of good faith required for possession in Arts. 526, 527, 528 and 529 of this Code are likewise necessary for the determination of good faith in the prescription of ownership and other real rights.
Art. 526—not aware that there exists any flaw which invalidates his title or mode of acquisition
Art. 527—good faith is always presumed
Art. 529—it is presumed that possession continues to be enjoyed in the same character in which it was acquired
Good faith cannot be invoked if the claimant has actual or constructive notice of the legal and valid rights of possession of another during the prescriptive period
1129. For the purposes of prescription, there is just title when the adverse claimant came into possession of the property through one of the modes recognized by law for the acquisition of ownership or other real rights, but the grantor was not the owner or could not transmit any right.
Art. 1130. The title for prescription must be true and valid
“Titulo Colorado”—such title where, although there was a mode of transferring ownership, still something is wrong because the grantor is not the owner
Art. 1131. For the purposes of prescription, just title must be proved; it is never presumed.
Art. 1132. The ownership of movables prescribes through uninterrupted possession for 4 years in good faith.
The ownership of personal property also prescribes through uninterrupted possession for 8 years, without need of any other condition
With regard to the right of the owner to recover personal property lost or of which he has been illegally deprived, as well as with respect to movables acquired in a public sale, fair, or market, or from a merchant’s store the provisions of Arts. 559 and 1505 of this Code shall be observed.
Art. 559—the possession of movable property acquired in good faith is equivalent to a title. If the possessor lost or of which the owner has been unlawfully deprived, has acquired it in good faith at a public sale, the owner cannot obtain its return without reimbursing the price paid therefor
1133. Movables possessed through a crime can never be acquired through prescription by the offender
The benefits of prescription are denied to the offender
However, if the thing was in the meanwhile passed to a subsequent holder, prescription begins to run (4 or 8 years, depending on the existence of good faith)
1134. Ownership and other rights over immovable property are acquired by ordinary prescription through possession of 10 years.
1135. In case the adverse claimant possesses by mistake an area greater, or less, than that expressed in his title, prescription shall be based on the possession.
The extent of property subject to the prescription shall be the one actually possessed or held by the claimant regardless of the size indicated or described in the title.
1136. Possession in wartime, when the civil courts are not open, shall not be counted in favor of the adverse claimant.
The possession of the adverse claimant during that time shall not be counted where it must be observed that the civil courts must be closed
If it is functioning, even during wartime, the possession may be counted in his favor
1137. Ownership and real rights over immovable also prescribe through uninterrupted adverse possession thereof for 30 years, without need of title or for good faith.
1138. In the computation of time necessary for prescription, the following rules shall be observed:
A. The present possessor may complete the period necessary for prescription by tacking his possession to that of his grantor or predecessor in interest
―grantor‖ and ―predecessor in interest‖ connote a transfer in a manner provided by law of property from one person to another
Tacking possession is allowed only when there is a privity of contract or relationship between the previous and present possessors.
B. It is presumed that the present possessor who was also the possessor at a previous time, has continued to be in possession during the intervening time, unless there is proof to the contrary
The presumption proceeds from a set of facts
For the presumption to exist, there must be a prior showing of the fact that the person presently possessing the property was also the one in possession of the same before the intervening time
C. The first day shall be excluded and the last day included
Chapter 3: PRESCRIPTION OF ACTIONS 1139. Actions prescribe by the mere lapse of time fixed by law.
Prescription of actions = limitation of actions
o Actions to enforce or preserve a right or claim must be brought within a certain period of time
Actions prescribe by mere lapse of time fixed by law
When the government is the real party in interest and is proceeding mainly to assert its own rights and recover its own property, there can be no defense on the ground of laches or limitation
o Prescription of action does not run against the government
Requisites for cause or right of action exists:
a. A right in favor of the plaintiff by whatever means and under whatever law it arises or is created must be present
b. An obligation on the part of the defendant to respect such right c. An act or omission on the part of such defendant violative of the right
of the plaintiff
It is the legal possibility of bringing the action that determines the starting point for the computation of the period of prescription, that is, only upon the happening of the third requisite when it can be said that a cause of action has arisen
1140. Actions to recover movables shall prescribe eight years from the time the possession thereof is lost, unless the possessor has acquired the
ownership by prescription for a less period, according to article 1132, and without prejudice to the provisions of articles 559, 1505, and 1133.
This refers to extraordinary prescription for movables period of which to bring an action to recover is fixed at 8 years
o However, action shall not prosper if it is brought after 4 years when the possessor has already acquired title by ordinary acquisitive prescription
If possessor acquired the movable in good faith at a public sale, owner cannot obtain its return without reimbursing the price paid therefore
In certain cases, owner is precluded from recovery without right to reimbursement although the action has not yet prescribed
Movables possessed through a crime cannot be acquired through prescription by offender
1141. Real actions over immovables prescribed after thirty years.
This provision is without prejudice to what is established for the acquisition of ownership and other real rights by prescription.
Action for recovery of title to, or possession of, real property or an interest therein can only be brought within 10 years after cause of action accrues
This article refers to extraordinary prescription for immovables
If action is based on fraud, action prescribes in 4 years from the discovery of fraud and such discovery is deemed to have taken place upon the issuance of the certificate of title over the property
If based on implied or constructive trust, in 10 years from the alleged fraudulent registration or date of issuance of certificate of title over the property
1142. A mortgage action prescribes after ten years.
1143. The following rights, among others specified elsewhere in this Code, are not extinguished by prescription:
1. To demand a right of way, regulated in article 649 2. To bring an action to abate a public or private nuisance
Rights not extinguished by prescription:
a. To demand partition of a co-ownership as long as the co-ownership is expressly or impliedly recognized
b. To enforce an express trust
c. To demand easement of light and view
d. To declare the inexistence of a contract or the nullity of a void judgment or of a void title
e. To compel a trustee to reconvey property registered in his name for the benefit of the cestui que trust
f. To compel reconveyance of land registered in bad faith provided it has not yet passed to an innocent purchaser for value
g. To quiet title brought by a person in possession of the property h. To recover real property or its value where the property was taken by
the government for public use without first acquiring title thereto i. To seek issuance of a writ of possession
j. To probate a will
k. To recover by the State non registrable land
1144. The following actions must be brought within ten years from the time the right of action accrues:
1. Upon a written contract
2. Upon an obligation created by law 3. Upon a judgment
The computation of the period should start from the date the cause of action accrues or from the day the right of the plaintiff is violated o The 10-year period in the case of a written contract is to be reckoned
from that time which is not necessarily the date of execution of the contract
Written contracts:
o Action for annulment under Art. 1391 shall be brough within 4 years o A P.N or a check or a ticket issued for transportation is a written
contract
o Right to claim payment of deficiency after foreclosure of real estate mortgage prescribes in 10 years
Obligations created by law:
o Obligation of the possessor to reconvey to the true owner real property arising from a constructive or implied trust
o Obligation of the winner in a gambling game to refund the amount won to the loser
o Obligation of the lessor to indemnify the lessee in good faith for useful improvements on the property leased
o Obligation of husband and wife, parents and children, and brothers and sisters to support each other
Judgment—judgment that is final and executory
o Under Rules of Court, judgment may be executed on motion within 5 years from the date of its entry or from the date it becomes final and executory. After the lapse of such time, and before it is barred by the statute of limitations, it may be enforced by ordinary action within 10 years
1145. The following actions must be commenced within six years: 1. Upon an oral contract
2. Upon a quasi-contract
Action upon an oral contract of tenancy to compel the reinstatement of a tenant comes under the provision
Recover local license fees illegally collected upon a quasi-contract 1146. The following actions must be instituted within four years:
1. Upon an injury to the rights of the plaintiff 2. Upon a quasi-delict
Purpose of an action or suit and the law to govern it, including the period of prescription, are to be determined by the complaint itself, its allegations and prayer for relief
Examples of ―injury to the rights of the plaintiff:‖
o A suit questioning the removal as corporate secretary must be brought within 4 years for the unjustified separation from employment or illegal dismissal is an injury to the rights of the plaintiff
o Action for recovery of damages for taking or retaining personal property, or incident to trespass upon real estate prescribes within 4 years
Examples of quasi-delicts:
o Prescriptive period is counted from the day quasi-delict occurred or was committed
o Action against the Central Bank for ―tortuous inference,‖ that is, in closing and liquidating a bank
Other actions that prescribe in 4 years:
a. To revoke or reduce a donation based on the birth, appearance, or adoption of a child
b. To revoke a donation based on non-compliance with a condition c. To rescind a contract
1147. The following actions must be filed within one year: 1. For forcible entry and detainer
2. For defamation
Other actions that prescribe in 1 year: a. To recover possession de facto
b. To revoke a donation on the ground of ingratitude
c. To rescind or recover damages if immovable is sold with non-apparent burden or servitude
d. To enforce warranty of solvency in assignment of credits
Actions that prescribe in 6 months:
a. To rescind the sale or reduce the price of real estate
1. sold at a certain price for a unit area, if the vendor is unable to deliver all that is stated in the contract
2. if made for a lump sum, of the vendor is unable to deliver all that which is included within the boundaries mentioned in the contract b. To enforce warranty against hidden defects of, or encumbrances upon
the thing sold
Action that prescribe in 40 days:
o Redhibitory action, based on the faults or defects of animals sold, must be brought within 40 days from the date of their delivery to the vendee
1148. The limitations of action mentioned in articles 1140 to 1142, and 1144 to 1147 are without prejudice to those specified on other parts of this Code, in the Code of Commerce, and in special laws.
The provisions of Title V on Prescription have suppletory application to specific cases of prescription found elsewhere in the Civil Code and in special laws
1149. All other actions whose periods are not fixed in this Code or in other laws must be brought within five years from the time the right of action accrues.
The right of action or cause of action accrues from the moment of commission or omission of an act by a party in violation of his duty to, or of the right, of another
Essential elements are:
a. Right in favor of a person (obligee)
b. A correlative obligation on the part of another (obligor) c. Am act or omission in violation of said right
1150. The time for prescription for all kinds of actions, when there is no special provision which ordains otherwise, shall be counted from the day they may be brought.
Prescriptive period for actions based on quasi-delict shall begin to run ―from the day the action may be brought,‖ that is, from the day the quasi-delict was committed
Unless otherwise provided, the statutory limitation for period for filing a criminal action begins to run on the commission of the offense
Where offended party expressly reserves his right to institute a separate civil action, the running of the period of prescription starts to run from the date reservation is made up to the time the civil action is actually filed in court
Statute of limitations begins to run as to each unpaid installment from the date the creditor could sue the debtor thereof
Prescriptive period to set aside or reform a simulate or fictitious written deed of pacto de retro sale where the alleged vendees make known their intention by overt acts not to abide by the true agreement, starts from the date they make known such intention
1151. The time for prescription of actions which have for their object the enforcement of obligations to pay principal with interest or annuity runs from the last payment of the annuity or of the interest.
This refers to obligations where payment of which is due at stipulated intervals
Hence, if the debt is not yet due, payment of interest or annuity will not start the running of the period
1152. The period for prescription of actions to demand the fulfillment of obligations declared by a judgment commences from the time the judgment became final.
1153. The period for prescription of actions to demand accounting runs from the day the persons who should render the same cease in their functions.
The period for the action arising from the result of the accounting runs from the date when said result was recognized by agreement of the interested parties.
There is no difference between actions for accounting and reliquidation since both involve the determination, adjustment and settlement of what is due to the parties under the law
1154. The period during which the obligee was prevented by the fortuitous event from enforcing his right is not reckoned against him.
General Rule: existence of a fortuitous event relieves the obligor from liability that might otherwise arise in the breach of an obligation or excuse an obligee from his failure to exercise a right that might otherwise constitute a waiver of said right
A court order deferring action on the execution of a judgment suspended the running of the 5-year period for execution of a judgment
Prescriptive period to institute foreclosure proceeding by a mortgagee-bank was held legally interrupted when the mortgagee-bank was placed under receivership by the Central Bank with express prohibition from transacting business
1155. The prescription of actions is interrupted when they are filed before the court, when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgement of the debt by the debtor.
This means that the period of prescription begins to run anew, and whatever time of limitation might have already elapsed is thereby negated and rendered inefficacious
Filing of an action in court:
o Civil actions are deemed commenced from the date of the filing and docketing of the complaint with the Clerk of Court
o Interruption lasts during the pendency of the action
o If the plaintiff desists from prosecuting the action to its final conclusion, the action is deemed abandoned and as if it has never been instituted
Written extrajudicial demand by the creditor when it does not interrupt prescription:
o Petition to open an administration proceeding over the estate of a deceased debtor, even if brought by the creditor
o Written extrajudicial demand addressed to a co-debtor will not interrupt the prescription as to other debtors who did not receive the demand
o In the absence of an existing obligation, the party demanding annulment cannot be considered a creditor, and Art. 1155 is not applicable
Written acknowledgement of the debt by the debtor:
o Written offer of payment works as a renewal of the obligation
OBLIGATIONS AND CONTRACTS TITLE 1: OBLIGATIONS CHAPTER 1: GENERAL PROVISIONS
1156. An obligation is a juridical necessity to give, to do or not to do.
Obligation—―legal bond whereby constraint is laid upon a person or group of persons to act or forbear on behalf of another person or group of persons‖
Elements:
1. Vinculum juris or juridical tie which is the efficient cause established by the various sources of obligations
2. The object which is the prestation or conduct, required to be observed 3. Subject-persons who, viewed from the demandability of the obligation
are the (a) active (oblige) and the (b) passive (obligor) subjects
―Persons‖—both natural and juridical persons
Prestations—to give, to do and not to do 1157. Obligations arise from:
1. Law 2. Contracts 3. Quasi-Contracts
4. Acts or omissions punished by law 5. Quasi-delicts
The enumeration is exclusive where there can be no other sources of obligations
Obligations are:
A. Civil--gives a right of action to compel their performance
B. Natural—based on equity and natural law; it does not grant a right of action to enforce their performance, but after voluntary fulfillment by
the obligor, they authorize the retention of what has been delivered or rendered by reason thereof
1158. Obligations derived from law are not presumed. Only those expressly determined in this Code or in special laws are demandable, and shall be regulated by the precepts of the law which establishes them and as to what has not been foreseen, by the provisions of this Book.
Law is the most important source of obligation o It does not depend upon the will of the parties
o Imposed by the State and is generally imbued with some public policy considerations
o The basis of the obligation must be clear o It cannot be presumed
Existing law enters into and forms part of a valid contract without need for the parties expressly making reference thereto
1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.
Contract—a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service
A contract may involve mutual and reciprocal obligations and duties between and among the parties
The willful non-fulfillment of the provisions of a contract may involve sanctions
The parties voluntarily impose upon themselves the performance of certain duties and obligations which, in the event of breach or willful non-performance, can prejudice the other party or parties
1160. Obligations derived from quasi-contracts shall be subject to the provisions of Ch. 1, Title 17, of this Book.
Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly enriched or benefited at the expense of the other
1161. Civil obligations arising from criminal offenses shall be governed by the penal laws, subject to the provisions of Art. 2177, and of the
pertinent provisions of Ch. 2, Preliminary Title, on Human Relations, and of Title 18 of this Book, regulating damages.
Civil liability attaches to any individual who is found to be criminally liable.
1162. Obligations derived from quasi-delicts shall be governed by the provisions of Ch. 2, Title 17 of this Book, and by special laws.
Quasi-delict—whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual relation between the parties
CHAPTER 2: NATURE AND EFFECTS OF OBLIGATIONS
1163. Every person obliged to give something is also obliged to take care of it with the proper diligence of a good father of a family, unless the law or the stipulation of the parties requires another standard of care.
―something‖—connotes a determinate object
Determinate object—definite, known and has already been distinctly decided and particularly specified as the matter to be given from among the same things belonging to the same kind
In case of a contrary stipulation of the parties, such should not be one contemplating relinquishment or waiver of the most ordinary diligence
Common carriers—persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public
1164. The creditor has a right to the fruits of the thing from the time the obligation to deliver it arises. However, he shall acquire no real right over it until the same has been delivered to him.
Acquisition of real right means that such right can be enforceable against the whole world and will prejudice anybody claiming the same object of the prestation
The real right only accrues when the thing or object of the prestation is delivered to the creditor
The personal right of the creditor can be defeated by a third person in good faith who has innocently acquired the property prior to the scheduled delivery regardless of whether or not such third person acquired the property after the right to the delivery of the thing has accrued in favor of the creditor
Personal right—the power of one person to demand of another, as a definite passive subject, the fulfillment of a prestation to give, to do, or not to do
Real right—the power belonging to a person over a specific thing, without passive subject individually determined, against whom such right may be personally exercised
1165. When what is to be delivered is a determinate thing, the creditor, in addition to the right granted him by Art. 1170, may compel the debtor to make the delivery.
If the thing is indeterminate or generic, he may ask that the obligation be complied with at the expense of the debtor.
If the obligor delays, or has promised to deliver the same thing to 2 or more persons who do not have the same interest, he shall be responsible for any fortuitous event until he has effected the delivery.
Generic—any object belonging to the same kind
Non-delivery of:
o Generic thing—the creditor may have it accomplished or delivered in any reasonable and legal way charging all expenses in connection with such fulfillment to the debtor
o Determinate thing—the remedy is to file an action to compel the debtor to make the delivery which is called specific performance
Fortuitous event—an event which ―could not be foreseen, or which though foreseen, were inevitable‖
A fortuitous event will not excuse the obligor from his obligation in 2 cases:
1. If the obligor delays
2. If he has promised to deliver the same thing to 2 or more persons who do not have the same interest
1166. The obligation to give a determinate thing includes that of delivering all its accessions and accessories, even though they may not have been mentioned.
1167. If the person obliged to do something fails to do it, the same shall be executed at his cost.
This same rule shall be observed if he does it in contravention of the tenor of the obligations. Furthermore, it may be decreed that what has been poorly done be undone.
1168. When the obligation consists in not doing and the obligor does what has been forbidden, it shall also be undone at his expense.
―at his cost‖—imply both the right to have somebody else perform the obligation and the right to charge the expenses thereof to the debtor 1169. Those obliged to deliver or to do something incur in delay from the time the obligee judicially or extra-judicially demands from them the fulfillment of their obligation.
However, the demand by the creditor shall not be necessary in order that delay may exist:
1. When the obligation or the law expressly so declare; or
2. When from the nature and the circumstances of the obligation it appears that the designation of the time when the thing is to be delivered or the service is to be rendered was a controlling motive for the establishment of the contract; or
3. When demand would be useless, as when the obligor has rendered it beyond his power to perform.
In reciprocal obligations, neither party incurs in delay if the other does not comply or is not ready to comply in a proper manner with what is incumbent upon him. From the moment one of the parties fulfills his obligation, delay by the other begins.
mora solvendi—delay or default committed by the debtor
mora accipiendi—delay or default committed by the creditor
o the debtor can consign whatever is due to the creditor in court if the circumstances warrant
Delay in the performance of the obligation must either be malicious or negligent
o Hence, if the delay was only due to inadvertence without any malice or negligent, the obligor will not be held liable under Art. 1170
Default generally begins from the moment the creditor demands the performance of the obligation
o Without such demand, judicial or extra-judicial, the effects of default will not arise.
o Commencement of a suit is a sufficient demand
o Obligor is liable for damages for the delay from the time of extra-judicial or extra-judicial demand
Art. 1169 is applicable only when the obligation is to do something other than the payment of money
Art. 2209 shall apply in obligations for the payment of money where ―if the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of the interest agreed upon, and in the absence of stipulation, the legal interest, which is 6% per annum‖
If the contract stipulates from what time interest will be counted, said stipulated time controls
An action or suit can be filed at anytime after the non-compliance of the other party of his obligation because the cause of action of the aggrieved party will always start from such time
2 cases where an extra-judicial demand should first be made prior to the filing of a civil suit:
1. Ejectment cases 2. Consignment cases
In ―default‖, it is necessary that the following requisites be present for the debtor to be in default:
1. That the obligation be demandable and already liquidated 2. That the debtor delays performance
3. That the creditor requires the performance judicially and extra-judicially
Demand is not necessary in 3 cases:
1. When the obligation or the law expressly so declares 2. When time is of the essence in a particular contract
3. When it would be useless, as when the obligor has rendered it beyond his power to perform
Reciprocal obligations—those created and established at the same time, out of the same cause and which results in a mutual relationship of creditor and debtor between the parties
o The performance of one is conditioned upon the simultaneous fulfillment of the other
o Obligation of one is a resolutory condition of the obligation of the other, the non-fulfillment of which entitles the other party to rescind the contract
Contract of loan Contract of lease Contract of sale
1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages.
If any of these four bases of liability co-exist with a fortuitous event or aggravates the loss caused by a fortuitous event, the obligor cannot be excused from being liable on his obligation
1171. Responsibility arising from fraud is demandable in all obligations. Any waiver of an action for future fraud is void.
The dolo or fraud necessarily involves a valid agreement but, in the performance of the same, fraud is committed
1172. Responsibility arising from negligence in the performance of every kind of obligation is also demandable, but such liability may be regulated by the courts, according to the circumstances.
Liability can be regulated by the courts depending on the circumstances 1173. The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place. When negligence shows bad faith, the provisions of Arts. 1171 and 2201, par. 2, shall apply.
If the law or contract does not state the diligence which is to be observed in the performance, that which is expected of a good father of a family shall be required.
Negligence—―omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place‖
o In essence, it is the want of care required by circumstances
o It is a relative or comparative, not an absolute term and its application depends upon the situation of the parties and the degree of care and vigilance which the circumstances reasonably require
o It must be always proven
Bad faith—a state of mind affirmatively operating with furtive design or with some motive of ill-will.
o It imports a dishonest purpose or some moral obliquity and conscious doing of wrong
o It is synonymous with fraud and involves a design to mislead or deceive another, not prompted by an honest mistake as to one’s rights or duties, but by some interested or sinister motive
Art. 2201, 2nd par—the obligor shall be responsible for all damages
which may be reasonably attributed to the non-performance of the obligation
1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable.
The general rule is that ―no one should be held to account for fortuitous cases‖
For the breach of an obligation due to an ―act of God‖, the following must concur:
1. The cause of the breach of the obligation must be independent of the will of the debtor
2. The event must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner
3. The debtor must be free from any participation in, or aggravation of the injury
When the negligence of a person concurs with an act of God in producing a loss, such person is not exempt from liability
When the object of prestation is generic—the debtor cannot avail of the benefit of a fortuitous event even if the object is wiped out by it
Even if there is a fortuitous event, a person can still be held responsible for the performance of his obligation if the law, or the stipulation of the parties, or when the nature of the obligation so requires
1175. Usurious transactions shall be governed by special laws.
Art. 1175 in itself does not prohibit usurious contracts
1176. The receipt of the principal by the creditor without reservation with respect to the interest, shall give rise to the presumption that said interest has been paid.
The receipt of a later installment of a debt without reservation as to prior installments, shall likewise raise the presumption that such installments have been paid.
A presumption must always arise from a fact or a set of facts
o To have probative value, the creation of the presumption must be provided by law
Presumption can be rebutted by strong evidence to the contrary
1177. The creditors, after having pursued the property in possession of the debtor to satisfy their claims, may exercise all the rights and bring all the actions of the latter for the same purpose, save those which are inherent in his person; they may also impugn the acts which the debtor may have done to defraud them.
Following successive measures which must be taken by the creditor before he can bring an action for rescission of an allegedly fraudulent sale:
1. Exhaust the properties of the debtor through levying by attachment and execution upon all the property of the debtor, except such as are exempt by law from execution
2. Exercise all the rights and actions of the debtor, save those personal to him
3. Seek rescission of the contracts executed by the debtor in fraud of their rights
1178. Subject to the laws, all rights acquired in virtue of an obligation are transmissible, if there has been no stipulation to the contrary.
However, the person who transmits the right cannot transfer greater rights than he himself has by virtue of the obligation, and vice versa
The transmissibility of rights may be limited, or altogether prohibited by stipulation of the parties
Transmission must be subject to pertinent laws
Chapter 3: DIFFERENT KINDS OF OBLIGATIONS Section 1: Pure and Conditional Obligations
1179. Every obligation whose performance does not depend upon a future or uncertain event, or upon a past event unknown to the parties, is demandable at once.
Every obligation which contains a resolutory condition shall also be demandable, without prejudice to the effects of the happening of the event.
Pure obligation—an unqualified obligation which is demandable immediately
o An obligation whose performance does not depend upon a future or uncertain event, or past event unknown to the parties
Conditional obligation—reverse of a pure obligation
o Condition—an act or event, other than a lapse of time, which, unless the condition is excused, must occur before a duty to perform a promise in the agreement arises or which discharges a duty of performance that has already risen
The performance depends upon a future or uncertain event or upon a past event unknown to the parties
Its efficacy or obligatory force is subordinated to the happening of a future or uncertain event
Resolutory condition—once the condition is established and acknowledged, the right immediately exists and therefore the obligation concomitant to the right can be demanded at once
o The obligation is resolved or extinguished by operation of law but such resolution can be made effective at some later date if the parties so stipulate in their contract
o In case a contract involves a reciprocal obligation, the obligation of one is a resolutory condition of the obligation of the other, the non-fulfillment of which entitles the other party to rescind the contract
Suspensive condition—demanded only upon the happening of the future or unknown event or a past event unknown to the parties, which constitutes the condition
o It gives rise to the performance of the obligation
o If the condition does not take place, the parties would stand as if the conditional obligation had never existed
o When a contract is subject to this, its birth or effectivity can take place only if and when the event which constitutes the condition happens or is fulfilled
Contract to sell—there is only a promise to sell upon the happening of the suspensive condition
Conditional contract of sale—if the suspensive condition is not fulfilled, the perfection of the contract is abated
Contract of sale Contract to sell Ownership thereto automatically
transfers to the buyer by operation of law without any further act having to be performed by the seller
Ownership will not automatically transfer to the buyer although the property may have been previously delivered to him
The prospective seller still has to convey title to the prospective buyer by entering into a contract of sale
1180. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already acquired, shall depend upon the happening of the event which constitutes the condition.
Debtor—usually the passive subject of the prestation because he is the one who can be compelled to give or do the prestation
Creditor—the active subject because he is the one who can compel performance
1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already acquired, shall depend upon the happening of the event which constitutes the condition.
o An act or event, other than a lapse of time, which must exist or occur before a duty to perform a promised performance arises
o If the condition does not occur and is not excused, the promised performance need not be rendered
Condition subsequent—known as the resolutory condition
o An event, the existence of which, by agreement of the parties, operates to discharge a duty of performance that has arisen
1182. When the fulfillment of the condition depends upon the sole will of the debtor, the conditional obligation shall be void. If it depends upon chance or upon the will of a third person, the obligation shall take effect in conformity with the provisions of this Code.
―when fulfillment of a condition‖—connotes a suspensive character of prestation
Potestative suspensive condition—if fulfillment depends upon the sole will of the debtor, then it is essentially a condition because whether the debtor will or will not fulfill the obligation is a future and uncertain event, which is void
o However, if the potestative condition is imposed not on the birth of the obligation but on its fulfillment, only the condition is avoided, leaving unaffected the obligation itself
A condition at once facultative and resolutory may be valid even though the condition is made to depend upon the will of the obligor
Mixed obligations—those which depend not only upon the will of the debtor but also upon chance and some other factors
Casual conditions—depend on chance, hazard, or the will of a third person
A resolutory condition that depends upon the will of a third person is not void
1183. Impossible conditions, those contrary to good customs or public policy and those prohibited by law shall annul the obligation which depends upon them. If the obligation is divisible, that part thereof which is not affected by the impossible or unlawful condition shall be valid. The condition not to do an impossible thing shall be considered as not having been agreed upon.
1184. The condition that some event happen at a determinate time shall extinguish the obligation as soon as the time expires of it if has become indubitable that the event will not take place.
1185. The condition that some event will not happen at a determinate time shall render the obligation effective form the moment the time indicated has elapsed, or if it has become evident that the event cannot occur.
If no time has been fixed, the condition shall be deemed fulfilled at such time as may have probably been contemplated, bearing in mind the nature of the obligation.
1186. The condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment.
The good faith-obligation of the parties includes an implied term on the part of the said parties not to impede, hinder, obstruct or prevent the fulfillment of the obligation
Constructive fulfillment—the obligor voluntarily prevents the fulfillment of the condition in an obligation where the law states that the obligation shall be deemed fulfilled
In reciprocal obligation, both parties are mutually obligors and also obligees, and any of the contracting parties may, upon non-fulfillment by the other party of his part of the prestation, rescind the contract or seek fulfillment.
1187. The effects of a conditional obligation to give, once the condition has been fulfilled, shall retroact to the day of the constitution of the obligation. Nevertheless, when the obligation imposes reciprocal prestations upon the parties, the fruits and the interests during the pendency of the condition shall be deemed to have been mutually compensated. If the obligation is unilateral, the debtor shall appropriate the fruits and interests received, unless from the nature and circumstances of the obligation it should be inferred that the intention of the person constituting the same was different.
In obligations to do and not to do, the courts shall determine, in each case, the retroactive effect of the condition that has been complied with.
In resolutory condition, the fulfillment of the event extinguishes the obligation; hence retroactivity is not relevant
o When the obligation imposes reciprocal prestations upon the parties, the fruits and interests during the pendency of the condition shall be deemed to have been mutually compensated
In suspensive conditions, the efficacy of the obligation is merely suspended or held in abeyance until the condition is fulfilled
o Art. 1187 applies to this where the suspensive condition occurs, the effect of a conditional obligation ―to give‖ retroacts to the day of the constitution of the obligation
If the obligation is unilateral, the debtor or obligor shall appropriate the fruits and interests received, unless from the nature and circumstances of the obligation it should be inferred that the intention of the person constituting the same is different
1188. The creditor may, before the fulfillment of the condition, bring the appropriate actions for the preservation of his right.
The debtor may recover what during the same time he has paid by mistake in case of a suspensive condition.
A creditor can file an injunction suit to stop the debtor from alienating his property which is supposed to be given to the creditor once a particular condition is fulfilled.
If prior to the happening of the event constituting the suspensive condition, the debtor, by mistake, pays the creditor, the debtor can recover because the obligation is not yet due and demandable
1189. When the conditions have been imposed with the intention of suspending the efficacy of an obligation to give, the following rules shall be observed in case of the improvement, loss or deterioration of the thing during the pendency of the condition:
1. If the thing is lost without the fault of the debtor, the obligation shall be extinguished
2. If the thing is lost through the fault of the debtor, he shall be obliged to pay damages; it is understood that the thing is lost when it perishes, or goes out of commerce, or disappears in such a way that its existence is unknown or it cannot be recovered
3. When the thing deteriorates without the fault of the debtor, the impairment is to be borne by the creditor
4. If it deteriorates through the fault of the debtor, the creditor may choose between the rescission of the obligation and its fulfillment, with indemnity for damages in either case
5. If the thing is improved by its nature, or by time, the improvement shall inure to the benefit of the creditor
6. If it is improved at the expense of the debtor, he shall have no other right than that granted to the usufructuary
The choice of the remedies to be pursued, whether rescission plus damages or fulfillment plus damages, belongs to the creditor regardless of the degree of deterioration caused by the debtor
If the deterioration caused by the debtor is so grave that the object goes out of commerce, it can be considered lost and the creditor can seek damages from the debtor
Usufruct—it gives a right to enjoy the property of another with the obligation of preserving its form and substance unless the title constituting it or the law otherwise provides
1190. When the conditions to have for their purpose the extinguishment of an obligation to give, the parties, upon the fulfillment of said conditions, shall return to each other what they have received.
In case of the loss, deterioration or improvement of the thing, the provisions which, with respect to the debtor, are laid down in the preceding article shall be applied to the party who is bound to return As for obligations to do and not to do, the provisions of the 2nd par. of Art. 1187 shall be observed as regards the effect of the extinguishment of the obligation.
Once a resolutory condition is fulfilled, the obligation is extinguished and there must be restitution of what has been obtained.
1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment of damages in either case. He may
also seek rescission, even after he has chosen fulfillment, if the latter should become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in accordance with Arts. 1385 and 1388 and the Mortgage Law.
―to rescind‖—―is to declare the contract void at its inception and to put an end to it as though it never was‖
Rescission or resolution under Art. 1191 is predicated on the breach of faith by any of the parties to a contract that violates the reciprocity between them
The power to rescind is not absolute and must be based on a serious or substantial breach of an obligation as to defeat the object of the parties in making the agreement
o A mere casual breach does not justify rescission of the contract
o The question of whether a breach of a contract is substantial depends upon the attendant circumstances
The implied power to rescind can only be enforced through court action, in the absence of stipulation to the contrary.
o The decision of the court is the revocatory act of rescission
The power to rescind need not be implied in all cases.
o The law does not prohibit parties from entering into an agreement providing that the violation of the terms of contract shall cause the cancellation, termination or rescission thereof even without court intervention
o But it is always provisional, being ever subject to scrutiny and review by the proper court
Notice must always be given to the defaulter before rescission can take effect
If the contract involved is a contract to sell, the termination is not a rescission under Art. 1191 but an enforcement of the contract
1192. In case both parties have committed a breach of the obligation, the liability of the first shall be equitably tempered by the courts. If it cannot be determined which of the parties first violated the contract,
the same shall be deemed extinguished, and each shall bear his own damages.
Section 2: Obligations with a Period
1193. Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that day comes.
Obligations with a resolutory period take effect at once, but terminate upon arrival of the day certain.
A day certain is understood to be that which must necessarily come, although it may not be known when.
If the uncertainty consists in whether the day will come or not, the obligation is conditional, and it shall be regulated by the rules of the preceding Section.
Period—designates a particular time which is certain to happen as the moment when the obligation will either be effective or be extinguished
Suspensive period—gives rise to the effectivity of the obligation
Resolutory period—gives rise to the extinguishment of the obligation
Obligation with a suspensive period:
o An obligation constitute at a much earlier date but its effectivity only commences on a certain future period of time
1194. In case of loss, deterioration, or improvement of the thing before the arrival of the day certain, the rules in Art. 1189 shall be observed. 1195. Anything paid or delivered before the arrival of the period, the obligor being unaware of the period or believing that the obligation has become due and demandable, may be recovered with the fruits and interests.
If the obligor delivered the object before the arrival of the period, and upon arrival of the period, the obligee is in the possession of the object, the obligor can only recover the fruits and interest accruing from the time of the delivery up to the arrival of the period.
1196. Whenever in an obligation a period is designated, it is presumed to have been established for the benefit of both of the creditor and the debtor, unless from the tenor of the same or other circumstances it should appear that the period has been established in favor of one or of the other.
The benefit of the period may be waived by the person in whose favor it was constituted
1197. If the obligation does not fix a period but from its nature and the circumstances it can be inferred that a period was intended, the courts may fix the duration thereof.
The courts shall also fix the duration of the period when it depends upon the will of the debtor.
In every case, the courts shall determine such period as may under the circumstances have been probably contemplated by the parties. Once fixed by the courts, the period cannot be changed by them.
Two-step process:
1. The court must first determine that ―the obligation does not fix a period‖ or that a period is made to depend upon the will of the debtor, but from the nature and circumstances it can be inferred that a period was intended
2. The court must decide what period was ―probably contemplated by the parties‖
1198. The debtor shall lose every right to make use of the period:
1. When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or security for the debt
Insolvency need not be judicially declared
2. When he does not furnish to the creditor the guaranties or securities which he has promised
Securities can take the form of real-estate mortgages or pledges 3. When by his own acts he has impaired said guaranties or securities
after their establishment, and when through a fortuitous event they disappear, unless he immediately gives new ones equally satisfactory
4. When the debtor violates any undertaking, in consideration of which the creditor agreed to the period
5. When the debtor attempts to abscond
If the debtor attempts to flee from his obligations, or to move away to evade payment of his indebtedness, the debt can be demanded from him immediately
Sec. 3 – Alternative Obligations
1199. A person alternatively bound by different prestations shall completely perform one of them.
The creditor cannot be compelled to receive part of one and part of the other undertaking.
―Different prestations‖—refers to both the strict sense and the loose sense of the word ―prestation‖
Partial performance of the different prestations cannot be considered fulfillment of the obligation and therefore cannot be done unless the creditor accepts such partial performance as complete performance
If all but one of the alternatives become legally impossible to fulfill, the obligation will cease to be alternative
1200. The right of choice belongs to the debtor; unless it has been expressly granted to the creditor.
The debtor shall have no right to choose those prestations which are impossible, unlawful or which could not have been the object of the obligation.
Any doubt as to whom the choice is given must always be interpreted in favor of the debtor
Only by an express grant of choice can a creditor have the right to choose which prestation is to be performed
1201. The choice shall produce no effect except from the time it has been communicated.
The creditor is always entitled to be notified of the choice.
